Spin-valve properties are adversely affected by heat treatments and in order to study this effect, microstructural analyses of Ti/Co/Cu/Co/MnFe/Ti spin-valve films annealed at 225 and at 290 °C have been performed. Whereas the lower temperature tends to optimize the giant magnetoresistance (GMR) ratio, the higher temperature induces a significant decrease in the GMR ratio (from 7.5&percent; to 5.2&percent;). High resolution electron microscopy studies have explained this result as being due to the formation of a TiCo alloy at the Ti/Co interface and to a decrease in the thickness of the sense layer. No significant modification of either the Co/Cu or the Cu/Co interfaces has been observed. ©1998 American Institute of Physics.